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b) Given the three portfolios in the table with expected return Ri and sensitivity factor bil and bi2, Portfolio A B R bil biz

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b) Given the three portfolios in the table with expected return Ri and sensitivity factor bil and bi2, Portfolio A B R bil biz 14% 0.8 0.8 10.8% 0.6 0.4 1112% 0.4 0.6 a) what is the equation of the plane in Ri, bil, and bi2 space defined by these portfolios? b) Determine how much arbitrage profit, is any can be made by buying or selling(short) the following portfolios (individually).

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